Weekly market of construction industry
The industry rose and fell in the week. This week (3.21-3.25), the building decoration industry (SW) fell by - 0.97%, stronger than the Shanghai Composite Index (- 1.19%), stronger than the performance of Shanghai and Shenzhen 300 (- 2.14%) and Shenzhen Component Index (2.08%). The weekly increase ranked 15th among the 31 primary industries of SW, and the industry ranking decreased by 5 compared with last week (10th). In terms of molecular sectors, the sectors of Chemical Engineering (2.06%), housing construction (1.85%) and decoration (0.92%) rose this week, and the engineering consulting service sector performed the weakest (- 4.54%).
Performance of individual stocks in a week. A total of 56 companies in the construction industry recorded an increase this week, accounting for 38%; The number of companies that rose more than the industry index (- 0.97%) this week was 70, accounting for 48%. The number of companies that rose in the construction industry this week and the number of companies whose performance exceeded the industry increase decreased compared with last week. The top 5 gainers in the industry are Guangdong No.2 Hydropower Engineering Company Ltd(002060) (61.16%), Shenzhen Grandland Group Co.Ltd(002482) (45.17%), Tianyu Eco-Environment Co.Ltd(603717) (16.90%), ST sea reclamation (13.66%) and St Cloud investment (13.56%); The top 5 industry declines this week were Tus-Design Group Co.Ltd(300500) (- 14.95%), Xinjiang Communications Construction Group Co.Ltd(002941) (- 15.27%), Shenzhen Ruihe Construction Decoration Co.Ltd(002620) (- 15.76%), Hualan Group Co.Ltd(301027) (- 16.52%), Shenzhen Qixin Group Co.Ltd(002781) (- 20.06%).
Industry valuation. From the perspective of the overall P / E ratio of the industry, as of March 25, the P / E ratio (TTM) of the architectural decoration industry was 10.43 times and the industry P / B ratio (MRQ) was 0.95 times. The P / E ratio of the industry decreased compared with that of last week. Compared with the SW primary industry, PE in the construction industry ranks fourth from bottom, higher than steel, real estate and banking; Pb valuation ranks the penultimate in all primary industries, higher than that of banks. The current industry's lowest price earnings ratio (TTM): Top 5 Shaanxi Construction Engineering Group Corporation Limited(600248) (3.31), China Railway Construction Corporation Limited(601186) (3.97), China State Construction Engineering Corporation Limited(601668) (4.27), China Railway Group Limited(601390) (5.20), Shandong Hi-Speed Road&Bridge Co.Ltd(000498) (5.92); The lowest price to book ratio (MRQ) is China Railway Construction Corporation Limited(601186) (0.55), Shenzhen Grandland Group Co.Ltd(002482) (0.65), Beijing Orient Landscape & Environment Co.Ltd(002310) (0.66), ST Meishang (0.68), China State Construction Engineering Corporation Limited(601668) (0.68).
Industry dynamic analysis
The 14th five year plan for modern energy system was released this week, which proposed that by 2025, the proportion of non fossil energy consumption would increase to about 20% and the proportion of non fossil energy power generation would reach about 39%; Phased progress has been made in the construction of new power system; In the field of photovoltaic power generation, accelerate Cecep Solar Energy Co.Ltd(000591) power generation, accelerate the construction of distributed photovoltaic in load centers and surrounding areas, accelerate the construction of large-scale wind power photovoltaic base projects focusing on deserts, Gobi and desert areas, actively promote the development and utilization of roof photovoltaic in industrial parks and economic development zones, and promote the integrated application of photovoltaic power generation and buildings.
According to the data of the national energy administration, China's newly added photovoltaic power generation installed capacity in 2021 was about 53 million kilowatts (53gw), of which the newly installed capacity of distributed photovoltaic was about 29gw, accounting for about 55% of the total newly installed capacity, exceeding 50% for the first time in history. The development trend of both centralized and distributed photovoltaic power generation is obvious. As an integral part of distributed photovoltaic, the construction of building photovoltaic power generation has been continuously promoted since 2021. In the near future, The 14th five year plan for building energy conservation and green building development proposes that the installed capacity of new buildings during the 14th Five Year Plan period is 50gw. Combined with the building photovoltaic construction planning and relevant specification requirements documents successively issued in some regions, the construction scale of building photovoltaic power generation may usher in strong growth in 2022 and the 14th Five Year Plan period. On March 14, Ningbo urban rural housing and Urban Rural Development Bureau issued several opinions on vigorously promoting the application of distributed photovoltaic power generation system on building roofs, which proposed that by the end of 2025, the installation of distributed photovoltaic power generation on building roofs will be comprehensively promoted, and more than 15% of building roofs will be equipped with distributed photovoltaic power generation system, and more than 90% of new buildings will fully implement distributed photovoltaic power generation system, The installed capacity of distributed photovoltaic in the construction field accounts for more than 60% of the cumulative photovoltaic grid connected capacity of the whole society. From May 1, 2022, public buildings, industrial buildings and residential buildings with a total construction area of no less than 30000 square meters newly applied for construction permit or submitted for construction drawing design review shall be equipped with photovoltaic power generation system. On March 21, Jiangmen issued the work plan for promoting the large-scale development of distributed photovoltaic in Jianghai district. Jianghai district will promote the construction of distributed photovoltaic in the whole district and focus on achieving the goals of carbon peak and carbon neutralization. On March 22, Hebei Provincial Energy Bureau issued a guidance document to standardize the construction of roof distributed photovoltaic, promote the safe, orderly and high-quality development of roof distributed photovoltaic in the province, and ensure the safety of personnel, equipment and power grid.
We believe that the current planning requirements at the national and local levels show a strong promotion of building photovoltaic construction. China's huge building roof area also provides a resource base for the development of building photovoltaic (BIPV and bapv). BIPV is a comprehensive construction project, covering a wide range of professional and industrial chain links, which brings new opportunities for the development of relevant enterprises in the construction industry. From the release of policies to the implementation of project orders, The enterprise is expected to form a new performance increment. It is suggested to continue to pay attention to the investment opportunities in the building photovoltaic sector. At present, some enterprises in the construction industry have begun to expand the building photovoltaic business, and the private enterprises that pay attention to the leading steel structure engineering Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Zhejiang Southeast Space Frame Co.Ltd(002135) and the operation and maintenance of the whole industrial chain layout of power design consulting engineering Suwen Electric Energy Technology Co.Ltd(300982) .
The overall performance of China's infrastructure investment data from January to February is bright, or because the special bonds issued by 21q4 and 22q1 have been put into use, and the progress of major construction projects has been accelerated, which reflects the remarkable effect of the early steady growth policy to a certain extent. In March, the spread of the national epidemic intensified, which may have a certain impact on the investment promotion and project construction in some regions in the short term. From the perspective of the whole year, the tone of China's steady growth is still clear, the policy force is sustained, and the financial capital supply is highly guaranteed. We are optimistic about the increase in the growth rate of infrastructure investment in 22h1, and continue to be optimistic about the future performance of the "two new and one heavy" sector. It is suggested to pay attention to the central infrastructure enterprises and local infrastructure leading sectors as the main force of infrastructure The survey and design sector, urban rail industry chain and high-quality targets of new power construction. At the same time, it is suggested to pay attention to the fabricated buildings and building photovoltaic sectors whose prosperity is expected to continue to rise during the 14th Five Year Plan period.
Investment advice this week
At present, steady growth continues to increase, fiscal expenditure has increased, infrastructure investment data from January to February are bright, policy implementation has achieved initial results, the demand for two new and one heavy construction in the construction industry is clear, local construction plans are large, and capital supply is relatively sufficient. This week, we continue to recommend high-quality infrastructure targets benefiting from the "two new and one heavy" under the goal of steady growth, and we suggest paying attention to affordable housing The high-quality targets for the development of prefabricated buildings and BIPV and the high-quality targets in the field of new power construction. In addition, there are sufficient orders in hand in the early stage, and the performance of 22q1 exceeds expectations. The company's performance is worth looking forward to.
Including:
1) China State Construction Engineering Corporation Limited(601668) , China Communications Construction Company Limited(601800) , China Railway Construction Corporation Limited(601186) , Metallurgical Corporation Of China Ltd(601618) , Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) and other central construction enterprises, Shandong Hi-Speed Road&Bridge Co.Ltd(000498) , Anhui Construction Engineering Group Corporation Limited(600502) and other regional infrastructure leaders, with excellent order performance and significant valuation advantages, are the main force to increase infrastructure and the main beneficiaries of steady growth and moderate improvement of industry concentration; 2) China Design Group Co.Ltd(603018) , Anhui Transport Consulting & Design Institute Co.Ltd(603357) , high-quality survey and design targets at the front of the industrial chain, give priority to the steady growth of infrastructure and the high growth of infrastructure demand in the province during the 14th five year plan;
3) Shenzhen Capol International&Associatesco.Ltd(002949) , the leader of prefabricated building design, benefited from the release of demand for prefabricated building construction during the 14th Five Year Plan period;
4) Guangzhou Metro Design & Research Institute Co.Ltd(003013) , Zhejiang Tiantie Industry Co.Ltd(300587) , respectively, are leading enterprises in urban rail design and urban rail vibration reduction, with stable industry status, strong technical and brand strength and high performance, fully benefiting from the release of urban rail construction demand under the promotion of new infrastructure;
5) new power construction: under the background of new power system construction with new energy as the main body, construction enterprises involved in the field of power construction are expected to benefit from the improvement of power grid investment and construction, operation and maintenance demand, and the release of BIPV and energy storage demand. It is recommended that Suwen Electric Energy Technology Co.Ltd(300982) , the leader of power construction and operation on the user side, and the layout of Zhejiang Southeast Space Frame Co.Ltd(002135) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Tus-Design Group Co.Ltd(300500) .
2022 industry investment perspective
In 2022, the construction industry is expected to usher in multiple development opportunities of fundamentals, policy driven and "construction +", and the industry is in the undervalued range, with prominent investment value.
The overall fundamentals of the construction industry are improving. In particular, the rapid growth of orders from central infrastructure enterprises and local infrastructure leaders will help improve performance. It will take the lead in benefiting from the release of infrastructure demand under the goal of stable growth. At the same time, it will actively layout new businesses, improve comprehensive strength and help valuation repair.
The policy is expected to become another driving force for the "spring agitation" of the industry in 2022. In the near future, the steady growth policy will continue to increase, the active fiscal policy should improve the efficiency, the local special debt can be launched within a certain period, the monetary policy should be flexible and appropriate, and the liquidity should be reasonable and abundant. In 2022, there are expectations of reducing reserve requirements and interest rates, and the loose monetary policy is conducive to the development of the industry. The "two new and one heavy" construction is expected to increase, and the infrastructure investment is moderately ahead of schedule, which is worth looking forward to.
The construction industry actively embraces the "new economy" and actively layout Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) . BIPV, energy storage and carbon sequestration have become the key areas of layout of listed companies. Some companies Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) have achieved initial results and are expected to continue to make efforts in the future to help improve the valuation level of companies and industries. Industry leaders and regional leaders will continue to cultivate traditional businesses, expand the whole industrial chain and extend upstream and downstream around traditional businesses, and fully benefit from the improvement of industry concentration. The release of future performance is sustainable.
On the whole, the construction industry has both "white horse" with good performance and extremely low valuation, and "dark horse" with layout of "building +" and standing at the market outlet. The overall trend of the industry is good, with fundamental support and policy catalysis. In addition, the "building +" helps to improve the valuation and is optimistic about the overall trend of the construction industry in 2022.
Suggestions on medium and long-term configuration
The overall fundamentals of the construction industry have improved. Industry leaders and regional leaders have benefited from the "national advance and people retreat" and the improvement of industry concentration. Both newly signed orders and performance have increased rapidly. At the same time, the construction industry actively embraces the "new economy" and the "construction +" era is coming, opening up the future development space of the company. On the main line of configuration, we propose to actively layout the "construction +" new business sector around the "two new and one heavy" infrastructure leaders and the "double carbon" background:
(1) "two new and one heavy" infrastructure leaders. Central construction enterprises and regional infrastructure leaders will fully benefit from "two new and one heavy" construction, and central construction enterprises and regional infrastructure leaders will fully benefit from the "two new and one heavy" construction. And central construction enterprises and regional infrastructure leaders are the main beneficiaries of "the country advances, the people retreat, the industry concentration increases, and the industry concentration increases. The new orders and performance are bright, and the valuation advantage is quite significant. It's suggested to focus on China State Construction Engineering Corporation Limited(601668) \ the valuation advantage is obvious. The new orders and performance and valuation advantage is very obvious. It's obvious valuation advantage is obvious. It's recommended to focus on China State Construction Engineering Corporation Limited(601668) andother regional infrastructure leaders. At the same time, urban rail design and vibration reduction will fully benefit from the release of urban rail transit demand under the construction of new urbanization. Guangzhou Metro Design & Research Institute Co.Ltd(003013) and Zhejiang Tiantie Industry Co.Ltd(300587) .
(2) high quality target of infrastructure survey and design China Design Group Co.Ltd(603018) , Anhui Transport Consulting & Design Institute Co.Ltd(603357) , the front end of the industrial chain gives priority to benefiting from the release of infrastructure demand under the goal of steady growth. During the 14th Five Year Plan period, the planned infrastructure investment scale of many provinces increased significantly, the contracting advantage of leading orders of high-quality design was significant, and the market share could be increased in time.
(3) pumped storage beneficiary company. With the change of energy structure, power supply security has been put on the agenda, and energy storage has become the main means to solve power security. As the most important way of energy storage, pumped storage has been strongly supported by national policies. In the future, pumped storage will enter a stage of rapid growth and encourage social capital to enter. Water conservancy and hydropower engineering enterprises own the construction and operation of pumped storage projects, and most of them have hydropower operation assets. It is possible to layout pumped storage power stations, which is expected to fully benefit the development of pumped storage in the future. Power Construction Corporation Of China Ltd(Powerchina Ltd)(601669) , Guangdong No.2 Hydropower Engineering Company Ltd(002060) and Anhui Construction Engineering Group Corporation Limited(600502) .
(4) prefabricated buildings. We believe that under the background of carbon peak and carbon neutralization goal, the prefabricated construction field mainly in the form of concrete structure and steel structure will continue to fully benefit from the further improvement of the industry prosperity and the release of demand, and is expected to become an important development field under the carbon neutralization goal. It is suggested to pay attention to Shenzhen Capol International&Associatesco.Ltd(002949) , Changjiang & Jinggong Steel Building(Group)Co.Ltd(600496) , Zhejiang Southeast Space Frame Co.Ltd(002135) .
(5) new power construction. In the context of the construction of new electric power systems with new energy as the main body, under the backdrop of new energy as the main body, building companies involved in power construction are expected to benefit from grid investment and construction and operation and operation and operation and maintenance needs, BIPV and energy storage demand releases, BIPV is expected to benefit from the backdrop of new energy as the building of new power systems, as the backdrop of a new power system with new energy as the main body. Building companies involved in the field of power construction are expected to benefit from grid investment, construction and operation and maintenance, enhanced demand for operation and maintenance, enhanced BIPV and release of BIPV and energy storage demand. Recommend the consumer side power construction and operation leader Suwen Electric Energy Technology Co.Ltd(300982) Suwen Electric Energy Technology Co.Ltd(300982) \ \359.
Risk tips: epidemic control is not as expected, policy implementation is not as expected, economic downside risk, PPP promotion is not as expected, fixed asset investment is declining, local financial growth is slow, etc
